Eurozone is expected to remain stable
The Eurozone services PMI for the month of February will be released today at 0900 GMT. According to the economists polled, the services activity in the Eurozone is expected to remain stable with the index registering a print of 56.7.
This marks an unchanged print in the reading from the month of January. Last week, the manufacturing PMI from the Eurozone showed a slight increase to 58.6, which was higher than the estimates of 58.5. The data showed that the pace of activity in the manufacturing sector in the Eurozone increased at a slower pace.
Despite the moderation in the pace of increase, the overall activity in the Eurozone remains strong with forecasts likely to show continued momentum in the region's economic growth.
The euro is like to be influenced by the Italian elections that were held over the weekend. This could add some additional volatility to the markets. Although the risks are limited, a surprise outcome could no doubt spook the markets.
The exit polls will likely give potential scenarios for the outcome of the election. It is however a widely known fact that the Italian elections are likely to result in a hung parliament. Full counting of votes is expected only after 2pm local time today.
Based on the above, the forex signal of the day is EURUSD. The currency pair bounced back higher but the gains were capped by the resistance level. Therefore, we expect to see the EURUSD post declines on the day. It is ideal to sell EURUSD at 1.2231 targeting 1.2090 with stops at 1.2363 as we expect to see the currency pair close lower on the day.
Entry Price: 1.2231
Take profit: 1.2090
Stop loss: 1.2363